The BitCoin market has become both stable and liquid; signs that it is beginning to show signs of maturity and critical mass.

Reddit has an active BitCoin community that will likely immediately support Reddit Inc accepting BC for Reddit Gold. Instant monies.

Reddit Inc support for its BitCoin community will likely drive more users to those communities. More eyes balls. More ads. More Monies.

Upside more monies with little downside risk.

Cool creds.

So it has been a year since this question was asked. And in that time Bitcoin went through a bubble and pop; but more than that Reddit and Bitcoin are different animals than they were a year ago, so I believe there is value in considering this question again.

First, this isn't so random a suggestion. Bitcoin has been receiving alot more coverage and this conversation is a natural flow from that momentum. Reddit's sister site Ars had a great article recently:

Okay. Normally, I would go into my evangelist mode and talk about how Bitcoin is important to maintaining freedom of speech online, how it secures the economic bedrock to an eventual free internet, how it develops P2P further, the importance of anonymity blah blah blah BUT I think there is merit in just talking about the economic reasons for Reddit Inc to accept btc for Reddit Gold.

Since accepting btc isn't mutually exclusive to accepting Paypal, this is more a question of how much upside is there for the 1 day it might take to organize. And whether there is enough upside to justify the cost of 1 day? I do believe there is both alot of short and long term financial upside.

First, there is very little downside risk. Bitcoin doesn't have a concept for charge backs built in. It also doesn't have a concept of Mastercard screwing everyone for middleman services; and in general your looking at around 1% merchant fees.

The risk that crashed the market last year, was the result of speculation and volatility. While the market has become more stable and liquid, services like Bit-Pay allow merchants to accept BC from customers and automatically convert it to USD. This removes the volatility risk associated with accepting and holding btc.

For most businesses there's a valid question about whether its existing customers even use Bitcoin. Usually the driver to accept btc is in the hopes of targeting new growth from the BC community. But this question is alot easier for Reddit Inc, we know Reddit has a dynamic and growing BC community. If Reddit were to accept BC, I think it is a fair gamble that Bitcoin redditors will have a higher % of Reddit Gold users than other communities. More or less because Reddit's Bitcoin community is crazy passionate about supporting the growth of Bitcoin. In other words, its a business decision that should show instant monies.

If the move is supported with a blog post supporting Bitcoin; it should also see interest from the wider Bitcoin community. It should begin a new growth snowball for the Reddit BC subs. This is an interesting spot because Bitcoin is likely to be overlooked as a growth opportunity by the other major social media sites. Reddit might hold its own for now in eyeball sucking AdviceAnimal memes but there's plenty of competition from FB, G+, 9gaga, pinterest, twitter, w.e. So while there are specialist BC community sites, its a market that is likely to overlooked. Which is interesting considering they should be high value users, all they do is talk about money. Should reddit be an early adopter, it should cement its position among the majors social media sites for the BC community. In other words, more users, more eyeballs, more monies.

While the argument that Reddit Inc would clearly make more monies is airtight /s. This isn't an argument that the Bitcoin market gone mainstream, which is often how the question is framed. Once it is mainstream, it will be obvious to accept btc. But I think the ground is set now that Bitcoin has all the potential to go mainstream. It only needs consumer and business experimentation and adjustment to get there.

I can't attach probabilities to the above; but I think they make sense. But really in the end, this is an argument that Reddit should lead the charge once again for online freedom. Its good for the internet, its good for business.

To simply accept bitcoin payments one doesn't really need to understand any of the technical complexities of Bitcoin. Just set up an account at bit-pay.com and receive dollars automatically deposited into your bank account.

Just like you don't need a masters degree in economics to accept Paypal.

Bitcoin is a p2p public ledger. You can think of it as a giant book which keeps who has how much money (bitcoins), which is distributed and highly resistant to adulteration. Bitcoin is just the unit of value here, coins are not discrete digital things that are stored separately.

As such, bitcoins are not inherently valuable. Since no one can create as many as they wish out of thin air, they are scarce, but this doesn't make them automatically valuable. What does give it value is that they can be transferred without any intermediaries and can be stored indefinitely as a digital asset. This gives them immense usefulness, which in turn reflects to the exchange rate.

As freely exchangeable tokens, they will have different utility in different users' hands, so I can't argue that they will have the same usefulness for everyone. For me, it's cool to be able to store money in my head, or back it up on a CD, or send it to anyone or anything on Earth without even pausing about any financial/jurisdictional/territorial/age-related concern.

It's all fun when you stay inside the Bitcoin economy, but getting in or out is a pain, precisely because of the problems of our current financial system. However, I think Bitcoin is very useful when you already have a digital asset or skill to trade. So it would be a good fit for trading D3 gold. The only problem I can see with it is the trust issues, which should be remedied by a system for trust ratings.

They are valuable for exactly the same reason any other stuff is valuable: People find them valuable. In the case of Bitcoin, exactly why? Because they are great as a means of exchange, that is acting as money. Bitcoins are cheap (most of the time free, sometimes you have to add a small fee that is orders of magnitude smaller than any VISA/paypal style fee) to transfer money over the internet. For example, I bought Mass Effect 3 with Bitcoins and both me and the merchant profited because we did not have to pay any company any fee.

If you want to understand how Bitcoin works and why they have this qualities I am talking about, you should go to the website someone suggested or go to the bitcoin.org page for more technical stuff. If you dont have a computer science or math foundation it can be complicated to understand, but in any case you should know that the best cryptography academics of the world have studied Bitcoin and no one has found a flaw, nor has bitcoin been ever hacked.

Bitcoin utilises public-key cryptography. A coin contains the owner's public key. When a coin is transferred from user A to user B, A adds B’s public key to the coin, and the coin is signed using A's private key. B now owns the coin and can transfer it further. A is prevented from transferring the already spent coin to other users because a public list of all previous transactions is collectively maintained by the network. Before each transaction the coin’s validity will be checked.

Ya. I do believe things will get worse. I do wonder what happens if only a few select groups have the computing power to make mining worthwhile; and whether this breaks the robustness of the P2P network...

In anycase, its also a sign that there is lots of computing power competing and available for the network. So its good for transactions.

It just means you use btc e-wallets like any other e-wallet that you would initially fund with USD. Its just people getting into Bitcoin now have missed out on the romance of mining "free" coin.

(Idea) Introducing: Reddit Silver. Redditors can now send Bitcoins directly to another reddit account for the purpose of micro payments towards a traditional Reddit Gold account.

Not many people want to give $30 to someone for a month of Reddit Gold, but $0.25 worth of Bitcoin? Heck ya! When the contributions of Reddit Silver reach the Gold level, the user is automatically upgraded and Reddit keeps the Bitcoin as payment.

In addition to eliminating volatility risk, if they accept bitcoins using BitPay, any security and financial uncertainties go away. With BitPay, they never take possession of the bitcoins, so they don't have to figure out how to account for them on their books. Or worry about securing their own wallet, or having it publicly known how much they have received.

Lets attach bitcoins to upvotes and downvotes. If you comment on something that a thousand people like, you are 1000 btc richer...but if you troll and get 1000 downvotes, your btc bank drops to 0. Sure the concept has it's flaws...but it'd be fun :) (and I watch as the downvotes come rolling in.)